Baltimore officials and advocates said they were pleased with revenue from the sale of the city’s tax-exempt assets after the city sold property at a steep discount to raise $37.3 million.
The money comes despite criticism from housing advocates and a governor from one of Baltimore’s biggest property-tax payers that the city has become a red flag for a nation that hasn’t started helping out distressed communities.
On Saturday, the city sold $180 million in tax-exempt bonds worth around 12 percent of the city’s total market value, of which about $16 million will be used to raise money for housing, according to its Treasurer’s Office.
Peter Esman, executive director of the Center for Opportunity at Maryland Institute College of Art, said it made more sense to sell property off-market, like other cities have done. And he argued that the city sold property in a city where prices have risen.
“I think what we are doing is recognizing that we have rent-control laws,” he said. “They will appeal to some members of the audience that live in Baltimore and desire to own a home.”
Despite the selling of property to raise money, Mayor Catherine Pugh and state and city officials admitted on Friday that the sale would produce a loss of revenue for the city, and at a rate of 15.6 percent of Baltimore’s entire current property-tax revenue base.
The sale of $18.8 million – which is the city’s largest tax sale since 2012 – is enough to make up for the loss of $75 million from the Baltimore City School Board sale in April.
The city sold nearly 9.3 percent of its $2.3 billion tax-exempt assets, or nearly 50 million properties, for $172.6 million to pay down debt. It also received $10.4 million in additional tax revenue and collected $16.6 million in property taxes for 32 properties — all tax-exempt.
The city can ultimately be saddled with millions of dollars of property and trust-fund debt.
That has prompted criticism from groups like the Maryland Housing Coalition, which has been fighting Baltimore’s tax-exempt sales of money because of their disproportionate impact on low-income people.
Mary Costello, who leads the organization, said that the city’s selling sales push such property into the hands of people “who can afford nothing but to own a home for them.”
By selling tax-exempt property for less, the city created an opportunity for some people to take advantage of an affordable opportunity, she said.
The plan appears to be working for the city. While sales on a smaller scale occurred in Baltimore and Worcester counties in Massachusetts, the sale for Baltimore is the largest in the city’s history, according to the city treasurer’s office.
On Sunday, Pugh held a news conference to discuss the sale and its benefits to Baltimore.
“They need the help of the tax payers to pay for the rents and mortgages they have,” Pugh said in her statement. “So this is an opportunity to ensure that that support is being made available in Baltimore City so that our families can afford their homes.”
But Mary A. Clark, the national policy director for the National Low Income Housing Coalition, said the sale made clear that the city has decided to shelter property from paying the property taxes that still must be paid by low-income people who live in Baltimore.
“They really are stealing from our neighbors,” Clark said. “They should not be doing this.”
Erica Roper contributed to this report.
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